The Listing Price Sweet Spot
Posted on: November 8, 2014 | Posted in: Sellers
Are you thinking of selling your house? If yes, then identifying an appropriate price range in which to list your home is a key contributor to a successful transaction. Specifically, there are pitfalls to avoid in venturing too far to either end of the pricing spectrum:
• Pricing too low – As a seller, the concerns here are fairly obvious. Quite simply, you do not want to undercut what the home is truly worth and deprive yourself of potential proceeds. Or, in other words, you do not want to be leaving money on the table.
• Pricing too high – While not as immediately evident, this can effectively be equally troublesome. Today’s buyers and their agents are educated; they can quickly assess whether a home is worth its asking price, and if not, they will continue looking elsewhere. Large sections of the buyer pool can be missed, and you can be left chasing down potentially interested parties through price changes and other concessions. This essentially lessens your negotiation stance, can add time and holding costs to the transaction, and potentially arrives at a price below what could have been reached if the home had been correctly priced in the first place. Additionally, as the majority of buyers are utilizing a mortgage mechanism in their purchase, a house’s price will actually be assessed twice – first by the buyer and then by the bank. If the agreed-upon value can not be supported by an appraisal, then the deal can be lost or at the very least, a new agreement will have to be reached.
In summary, there is a pricing sweet spot to be found and a definite cost to missing it.
One of the primary areas in which a real estate advisor can provide assistance to a seller is in assessing and identifying the most appropriate listing price for a property – a listing price which takes into consideration all of the current market factors and which has the goal of selling the property at the highest possible value. However, too many agents just take the listing at any price and then try to ‘work the seller’ for a price correction later. As a seller, you should insist that the agent prove to you that they have a belief in the price they are suggesting and that it is supported by discernable evidence. In short, make sure you understand the pricing strategy and how it ultimately benefits you.
If you are interested in selling your house, contact us today for an honest, thorough assessment and a custom solution targeted at maximizing your return on investment.Previous Next